I wrote on Tuesday that a big fight was coming in the Senate over SAFRA, the Obama administration’s attempt to reform the student loan system, making billions of dollars of new money available to educational institutions and student financial aid.

Well, the fight is here, and punches are being thrown.

The Washington post reported last night that six Democratic senators have signed a letter objecting to passage of SAFRA as it now stands, and that White House officials have been meeting with congressional leaders to try to find a way forward.

The crucial question right now is whether SAFRA will be included in the upcoming reconciliation vote in the Senate, under which issues can be considered on a straight up-or-down vote, avoiding the filibusters that so often snarl Senate legislation these days. The primary purpose of the reconciliation bill is the passage of the federal budget, but it has emerged as the best chance for the passage of health care reform and student loan reform in the immediate future.

The current system, which the New York Times described yesterday as one in which “the government pays private, for-profit student lending companies to make risk-free loans using taxpayer money,” is a cash cow for banks, which have lobbied aggressively to kill reform.

See my Tuesday post for more info on SAFRA and the current legislative battle.